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Saturday, April 26, 2014

Accident claim - M.V. Act - Employee died at his age 46 years - future potentiality -Apex court held that where the deceased died at an early age of 46 years, had 12 more years of service, would have got promotions, resulting in hike in his pay and emoluments, we feel that ends of justice would be met if the potential earning capacity of the deceased is fixed at Rs.30,000/- p.m. Accordingly, we fix the potential earning capacity of the deceased per month at Rs.30,000/- instead of Rs.25,000/- as fixed by the Tribunal. After deducting 1/3rd portion from Rs.30,000/- towards personal expenses, the dependency benefit for the appellants would come to Rs.20,000/- and the multiplier applicable is 12 taking into consideration the age of the deceased. Accordingly, the loss of dependency is fixed at Rs. 20,000 x 12 x 12 = Rs.28,80,000/-. In addition to that, the appellants are entitled to Rs. 50,000/- as conventional amount as granted by the Tribunal. Thus, the appellants would be entitled to a total compensation of Rs. 29,30,000/- with interest @ 7.5% p.a.= RAMILABEN CHINUBHAI PARMAR & ORS. … APPELLANTS VERSUS NATIONAL INSURANCE CO. & ORS. … RESPONDENTS = 2014 ( April.Part ) judis.nic.in/supremecourt/filename=41453

Accident claim - M.V. Act - Employee died at his age 46 years - future potentiality -Apex court held that where the deceased died at an early age of 46 years, had 12 more years of service, would have got promotions, resulting in hike in his pay and emoluments, we feel that ends of justice would be met if the potential earning capacity of the deceased is fixed atRs.30,000/- p.m. Accordingly, we fix the potential earning capacity of the deceased per month at Rs.30,000/- instead of Rs.25,000/- as fixed by the Tribunal. After deducting 1/3rd portion from Rs.30,000/- towards personal expenses, the dependency benefit for the appellants would come to Rs.20,000/- and the multiplier applicable is 12 taking into consideration the age of the deceased. Accordingly, the loss of dependency is fixed at Rs. 20,000 x 12 x 12 = Rs.28,80,000/-. In addition to that, the appellants are entitled to Rs. 50,000/- as conventional amount as granted by the Tribunal. Thus, the appellants would be entitled to a total compensationof Rs. 29,30,000/- with interest @ 7.5% p.a.=The appellants herein are the claimants who filed a petition beforethe Motor Accident Claims Tribunal, Ahmedabad claiming an amount of Rs.40.00 lakhs as compensation on the ground that the sole breadwinner oftheir family, who was 46 years old, had died in a road accident. TheTribunal, relying upon the oral as well as documentary evidence, took theincome of the deceased at Rs.15,000/- p.m. and considering his age at 46,applied the multiplier 12. In addition to that, the Tribunal grantedRs.50,000/- as conventional amount, and finally awarded Rs.22,10,000/- ascompensation to the appellants with interest @ 9% p.a.=It is evident from the order of the Tribunal as well asSalary Certificate filed as (Annexure P-2) the deceased was getting a grosssalary of Rs.14,103.77 ps. p.m. apart from benefits like GPF, D.A., andother allowances. It is also stated therein that the deceased was havinganother 12 years of service and there is a chance of revision of pay scalesand getting one more promotion. Taking all these into consideration, theTribunal arrived at a conclusion that the salary of the deceased would beRs.35,000/- p.m. at the time of his retirement and Rs.25,000/- p.m. as hispotential earning capacity on the date of his death. After deductingRs.10,000/- towards personal expenses, his liability towards taxation etc.,the net contribution of the deceased towards his dependents was arrived atRs.15,000/- p.m., applied the multiplier 12 taking into consideration theage of the deceased and finally awarded an amount of Rs.22,10,000/- astotal compensation payable with interest @ 9% p.a. The High Court withoutproperly appreciating the factum of the young age of the deceased andwithout taking future prospects of the deceased into consideration hasreduced the compensation from Rs.22,10,000/- to Rs.13,90,000/- and the rateof interest from 9% p.a. to 7.5% p.a.7. Even though we are not convinced with the calculation and reasoninggiven by the Tribunal, but keeping in view the peculiar facts andcircumstances of the case, where the deceased died at an early age of 46years, had 12 more years of service, would have got promotions, resultingin hike in his pay and emoluments, we feel that ends of justice would bemet if the potential earning capacity of the deceased is fixed atRs.30,000/- p.m.Accordingly, we fix the potential earning capacity of thedeceased per month at Rs.30,000/- instead of Rs.25,000/- as fixed by theTribunal. After deducting 1/3rd portion from Rs.30,000/- towards personalexpenses, the dependency benefit for the appellants would come toRs.20,000/- and the multiplier applicable is 12 taking into considerationthe age of the deceased. Accordingly, the loss of dependency is fixed atRs. 20,000 x 12 x 12 = Rs.28,80,000/-. In addition to that, the appellantsare entitled to Rs. 50,000/- as conventional amount as granted by theTribunal. Thus, the appellants would be entitled to a total compensationof Rs. 29,30,000/- with interest @ 7.5% p.a.8. The appeals are accordingly allowed. The orders passed by the Courtsbelow are set aside. There shall be no order as to costs.

The appellants herein are the claimants who filed a petition beforethe Motor Accident Claims Tribunal, Ahmedabad claiming an amount of Rs.40.00 lakhs as compensation on the ground that the sole breadwinner oftheir family, who was 46 years old, had died in a road accident. TheTribunal, relying upon the oral as well as documentary evidence, took theincome of the deceased at Rs.15,000/- p.m. and considering his age at 46,applied the multiplier 12. In addition to that, the Tribunal grantedRs.50,000/- as conventional amount, and finally awarded Rs.22,10,000/- ascompensation to the appellants with interest @ 9% p.a.
2. Aggrieved thereby, the respondent-Insurance Company preferred First
Appeal No. 301 of 2003 before the High Court. The appellants herein also
filed Cross Objection No. 107 of 2006 in the said appeal seeking
enhancement. After hearing the Insurance Company as well as claimants, the
High Court determined the net salary of the deceased as Rs.14,000/- p.m. by
applying the multiplier 8, arrived at the compensation towards loss of
dependency as Rs.13,44,000/-. It further added Rs.25,000/- for loss of
estate and Rs.15,000/- for loss of consortium to the widow of the deceased
and Rs.5,000/- towards funeral expenses. The High Court , thus, in all,
awarded a total amount of Rs.13,90,000/- as compensation with 7.5%
interest. Thus, the High Court by the impugned order reduced the
compensation from Rs.22,10,000/- to Rs.13,90,000/- and reduced the rate of
interest from 9% p.a. to 7.5% p.a.
3. Now aggrieved by the order of the High Court the claimants-appellants
filed these appeals for enhancement of compensation.
4. It is mainly contended by the learned counsel for the appellants
that the earning capacity of the deceased was Rs.35,000/- p.m. as per the
salary certificate and other documents, but the High Court has without any
reason, reduced the compensation amount by fixing Rs.14,000/- as the
monthly salary of the deceased. Similarly, the High Court has not even
considered the future prospects of the deceased who died at the young age
of 46 years and the High Court has ignored the fact that 12 years service
was left for the deceased on the date of death.
5. On the other hand, learned counsel for the Insurance Company
supported the order of the High Court and submitted that there is no reason
for this Court to interfere with the order of the High Court.
6. We have heard learned counsel for the parties and perused the
material before us. It is evident from the order of the Tribunal as well asSalary Certificate filed as (Annexure P-2) the deceased was getting a grosssalary of Rs.14,103.77 ps. p.m. apart from benefits like GPF, D.A., andother allowances. It is also stated therein that the deceased was havinganother 12 years of service and there is a chance of revision of pay scalesand getting one more promotion. Taking all these into consideration, theTribunal arrived at a conclusion that the salary of the deceased would beRs.35,000/- p.m. at the time of his retirement and Rs.25,000/- p.m. as hispotential earning capacity on the date of his death. After deductingRs.10,000/- towards personal expenses, his liability towards taxation etc.,the net contribution of the deceased towards his dependents was arrived atRs.15,000/- p.m., applied the multiplier 12 taking into consideration theage of the deceased and finally awarded an amount of Rs.22,10,000/- astotal compensation payable with interest @ 9% p.a. The High Court withoutproperly appreciating the factum of the young age of the deceased andwithout taking future prospects of the deceased into consideration hasreduced the compensation from Rs.22,10,000/- to Rs.13,90,000/- and the rateof interest from 9% p.a. to 7.5% p.a.7. Even though we are not convinced with the calculation and reasoninggiven by the Tribunal, but keeping in view the peculiar facts andcircumstances of the case, where the deceased died at an early age of 46years, had 12 more years of service, would have got promotions, resultingin hike in his pay and emoluments, we feel that ends of justice would bemet if the potential earning capacity of the deceased is fixed atRs.30,000/- p.m. Accordingly, we fix the potential earning capacity of thedeceased per month at Rs.30,000/- instead of Rs.25,000/- as fixed by theTribunal. After deducting 1/3rd portion from Rs.30,000/- towards personalexpenses, the dependency benefit for the appellants would come toRs.20,000/- and the multiplier applicable is 12 taking into considerationthe age of the deceased. Accordingly, the loss of dependency is fixed atRs. 20,000 x 12 x 12 = Rs.28,80,000/-. In addition to that, the appellantsare entitled to Rs. 50,000/- as conventional amount as granted by theTribunal. Thus, the appellants would be entitled to a total compensationof Rs. 29,30,000/- with interest @ 7.5% p.a.8. The appeals are accordingly allowed. The orders passed by the Courtsbelow are set aside. There shall be no order as to costs.